China hits back at US probe, sanctions 5 American subsidiaries of S Korean shipbuilding firm

Beijing [China], Seoul [South Korea], October 14 : China on Tuesday imposed sanctions on five US-linked subsidiaries of South Korean Hanwha Ocean Corporation, in response to Washington's probe into China's maritime, logistics, and shipbuilding industries, according to an official statement, state media reported.

The sanctions, announced by China's Ministry of Commerce, will take effect today.

The Chinese Commerce Ministry, as cited by Global Times, said that the US actions "seriously violate international law and the basic norms governing international relations, and gravely undermine the legitimate rights and interests of Chinese enterprises."

It added that the US subsidiaries of the Hanwha Ocean Corporation have "assisted and supported investigations conducted by the US government, endangering China's sovereignty, security and development interests."

The sanctions come amidst US President Donald Trump's repeated emphasis on the need for shipbuilding cooperation between Seoul and Washington and according to a report in the Yonhap, Hanwha Ocean had been expected to be one of the biggest beneficiaries under the allies' strengthened shipbuilding ties.

The South Korean news outlet cited industry insiders in Seoul assessing Beijing's move to be both a countermeasure against Washington and a warning to South Korea, China's biggest rival in the shipbuilding sector.

According to the Chinese state media, the country's commerce ministry has identified the five subsidiaries as Hanwha Shipping LLC, Hanwha Philly Shipyard Inc, Hanwha Ocean USA International LLC, Hanwha Shipping Holdings LLC, and HS USA Holdings Corp.

China's Transport Ministry has initiated an investigation into how the US Section 301 investigation affects the security and development interests of its shipping and shipbuilding sectors, as well as related industrial and supply chains, according to the official news agency Xinhua.

Meanwhile, China announced today that new special port fees will take effect for US ships arriving in Chinese ports, according to state media reports.

The special charges, according to China were imposed with the aim to "safeguard the legitimate rights and interests of Chinese shipping industry and enterprises while ensuring fair competition in international shipping," Global Times reported.

Ships subject to the special port fees also include those owned or operated by entities where US enterprises, organizations and individuals hold a direct or indirect stake of 25 per cent or more, as well as all the US-flagged and US built vessels, China's Ministry of Transport said.

The Chinese Ministry in a statement outlined a phased escalation for the special port fees on eligible US vessels berthing at Chinese ports, which will initially be 400 yuan ($56) per net ton from Tuesday and increase annually on April 17 for the subsequent three years.

The levy was imposed by China on October 10 in response to the US decision to levy additional port fees on Chinese ships arriving at American ports from October 14, the Chinese Transport ministry said.

The ministry, according to Global Times had noted that the US actions have seriously violated WTO rules and the China-US maritime transport agreement and caused severe disruption to maritime trade between the two countries.

China had also announced moves to tighten controls on its rare earth exports.

US President Donald Trump had then responded with a threat of imposing an additional 100 per cent tariff on China and other restrictive measures, set to take effect on November 1.

China on Tuesday urged the US to "correct its wrongdoings" and "demonstrate sincerity in trade discussions" to meet each other halfway, state media reported.

The statement by China's Ministry of Commerce followed Monday's working-level talks between Washington and Beijing, amidst an escalation in trade tensions between the world's two largest economies.

"The US side cannot seek talks on one hand while threatening to introduce new restrictive measures on the other. This is not the right way to get along with China," a spokesperson for the Chinese Ministry said in a statement today according to Xinhua.

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